EU Commission to tackle ‘inefficient’ SEP licensing system
The European Commission is to unveil potential new regulation and/or a directive on standard-essential patents (SEPs), after it criticised the present licensing system for its lack of transparency, unpredictability and inefficiency.
The commission confirmed its plan when it added an item to its list of published initiatives, entitled “ Intellectual property—new framework for standard-essential patents” yesterday, July 13.
A ‘fair and balanced framework’
The summary accompanying the commission’s notice states: “Patent-holders commit to licence their SEPs to users of the standard on fair, reasonable and non-discriminatory terms and conditions. However, the system for licensing SEPs is not transparent, predictable and efficient.”
The initiative is intended to create a fair and balanced licensing framework and may combine legislative and non-legislative action, according to the commission.
This development comes as SEPs evoke debate and controversy worldwide. Last week, the Biden administration issued a sweeping executive order to spur competition in the US economy, which called for substantial SEP revision.
SEP owners such as Nokia have long held that licensees should access products according to fair, reasonable and non-discriminatory (FRAND) terms.
But suppliers insist that SEPs should be licensed instead to suppliers, rather than the manufacturers of end-products.
Policy recommendations
In February, the commission’s SEPs Expert Group published its long-awaited contribution to the debate on how SEPs are licensed, including key policy recommendations.
The group included Monica Magnusson, vice president of IPR policy at Ericsson, and Matthias Schneider, chief licensing officer at Audi.
The report included several non-binding policy recommendations, including licensing at a single level in the value chain for a particular product, which the group argued could reduce transaction costs.
The group also recommended that FRAND royalties should be passed on “downstream” in the chain of suppliers.
If the commission decides to issue an EU directive on SEP licensing and enforcement, it would then have to be transposed into national laws by the EU's 27 member states.
The process is expected to affect the workings of the Unified Patent Court, which has finally been given the green light by Germany’s Federal Constitutional Court.
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